Amazon Still Mum On Web Services Revenue

Financial analysts looking for details on Amazon Web Services in the second quarter were left unsatisfied yesterday. Amazon CFO Thomas Szkutak said AWS is growing "very nicely," but didn't provide any information on the size or growth rate of the company's cloud computing business.

Financial analysts looking for details on Amazon Web Services in the second quarter were left unsatisfied yesterday. Amazon CFO Thomas Szkutak said AWS is growing "very nicely," but didn't provide any information on the size or growth rate of the company's cloud computing business.What we do know about the scope of Amazon Web Services is contained in a footnote in Amazon's 12-page statement on its second quarter 2009 financials. Of the $4.65 billion in revenue reported by the company, $140 million were within a category called "other." That includes revenue generated by Amazon's Enterprise Solutions Web hosting business, miscellaneous marketing and promotional activities such as co-branded credit cards, and Amazon Web Services. Amazon's "other" sales grew 11% in the quarter (or 15% with foreign exchange rates factored out), compared to the same period a year ago. Sequentially, "other" revenues rose 17% from the first quarter of the year.

Amazon's "other" revenues amounted to just 3% of the company's overall revenue in the second quarter. Thus, AWS remains a small slice of the e-retailer's sales flow, but how much we don't know.

During Amazon's conference call with analysts to go over the results, two analysts tried to coax more information from Amazon. Jim Friedland with Cowen and Co. asked of AWS, "Are you seeing any momentum there?" Amazon CFO Szkutak replied, "Certainly our Web Services business is growing very nicely, and that reflected in the numbers."

That was followed by a question from another analyst. "Are there any specific segments of the Web services business that are performing particularly well? Which ones have the most potential long term to really contribute?" Amazon VP of investor relations Rob Eldridge answered that one: "We don't go down into specific service-related financials in this market, as you well know. But we're very, very happy with EC2, S3, Simple database, and the entire suite of services."

Both answers are short, sweet, and, for anyone trying to get their arms around the cloud computing market, unsatisfying. The IT industry continues to have little visibility into AWS, the bell weather service of this emerging market. About all we know is that AWS is, at most, a $500 million annual business and maybe half that.
Industry observers are left to piece together a snapshot of AWS, first launched three years ago, as best we can. Guy Rosen, founder of cloud startup InfiBase, tells me he thinks that Amazon's EC2 service is growing at almost 10% per month. (See "Amazon Web Services Secrets Revealed.") But I'm not so sure about that, and, in the meantime, the cloud services market is flying blind.

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